Morning market news for December 14th 2012. Stocks in focus this morning include, VeriFone Systems Inc (NYSE:PAY), Schlumberger Limited. (NYSE:SLB), AVG Technologies NV (NYSE:AVG), Quiksilver, Inc. (NYSE:ZQK), and Amgen, Inc. (NASDAQ:AMGN).
Morning Market Update
Market Levels
• US: Dow Futures: 13100.00 (0.05%), S&P 500 Futures: 1411.00 (-0.07%), NASDAQ Futures: 2638.00 (-0.34%)
• Europe: CAC: 3638.16 (-0.14%), DAX: 7586.09 (0.05%), FTSE: 5917.72 (-0.20%).
• Asia-Pacific: Australia: 4583.10 (0.01%), China: 2150.63 (4.15%), Hong Kong: 22605.98 (0.71%), India: 5879.60 (0.48%), Japan: 9737.56 (-0.05%).
• Metals: Gold: 1696.40 (-0.02%), Silver: 32.51 (0.48%), Copper: 3.67 (0.40%)
• Energy: Crude Oil: 86.42 (0.62%), Natural Gas: 3.30 (-1.37%)
• Commodities: Corn: 7.21 (-0.59%), Soya Bean: 14.86 (0.19%), Wheat: 8.14 (-0.34%)
• Currency: EUR/USD: 1.3076 (-0.01%), GBP/USD: 1.6112 (0.00%), USD/JPY: 83.5600 (-0.11%)
• 10 year US Treasury: 1.864% (0.005)
Market and Economic News Update
U.S. stock-index futures mixed: U.S. stock-index futures are pointing to a narrowly mixed open on Friday. On the economic front, consumer prices fell 0.3 percent in November for the first time in six months, the Labor Department said today. Economists were expecting a decline of 0.2 percent. Core CPI, which excludes food and gas prices, rose 0.1 percent last month. Industrial production numbers for November are due at 9.15 A.M. ET.
European markets flat: European markets gave up gains made earlier in the session as investor sentiment was dampened by news that euro zone leaders have postponed major decisions on economic integration till June next year. Stocks climbed in early trade after an improvement in PMI data for the euro zone. The German DAX (INDEXDB:DAX) was trading 0.1 percent higher at 7586.09, the FTSE 100 (INDEXFTSE:UKX) shed 0.2 percent to 5917.72 and the CAC 40 (INDEXEURO:PX1) gave up 0.1 percent to 3638.16. The euro zone blue-chip ESTX 50 PR.EUR (INDEXSTOXX:SX5E) (Euro Stoxx 50) was largely unchanged in trade today.
Asian markets end mixed; Chinese shares soar: Asian markets closed mixed on Friday, but the Shanghai Composite Index posted its biggest advance in three years, following strong manufacturing data. HSBC’s China manufacturing Purchasing Managers’ Index rose to a 14-month high of 50.9 in December. The NIKKEI 225 (INDEXNIKKEI:NI225) closed down 0.05 percent at 9,737.5. The HANG SENG INDEX (INDEXHANGSENG:HIS) added 0.7 percent on the day and 1.9 percent on the week at 22,606 points, while the SSE Composite Index (SHA:000001) (Shanghai Composite Index) soared 4.3 percent, the most since October 2009, helping other Asian markets add to gains or pare early losses. The S&P/ASX 200 (INDEXASX:XJO) index ended flat at 4,583.1 points. The benchmark Indian 30-share BSE SENSITIVE (INDEXBOM:SENSEX) index ended the day 0.5 percent higher.
Stocks to Watch
Discovery Communications Inc. (NASDAQ:DISCA)
Discovery Communications Inc. (NASDAQ:DISCA) has agreed to buy German broadcaster ProSiebenSat.1 Media AG (ETR:PSM) (FRA:PSM)’s Nordic television channels for about $1.7 billion. The assets include 12 television networks in Norway, Sweden, Denmark and Finland, and comes at a time when Discovery Communications Inc. (NASDAQ:DISCA) is trying to expand its footprint in new markets to counter slowing growth in the U.S. Discovery Communications Inc. (NASDAQ:DISCA) has also agreed to take 20 percent equity stakes in French television major Television Francaise 1 SA (EPA:TFI)’s Eurosport Group and four pay-TV channels in France. Separately, Separately, Discovery Communications Inc. (NASDAQ:DISCA) said its board has approved a $1 billion increase to its existing share repurchase program. Shares of Discovery Communications Inc. (NASDAQ:DISCA) were inactive in morning trade.
VeriFone Systems Inc (NYSE:PAY)
Electronic payment services provider VeriFone Systems Inc (NYSE:PAY) said fourth quarter profit tumbled 86 percent from a year-ago when the company logged a significant income tax benefit. Profit for the three months ended October 31 fell to $27 million, or 24 cents a share, from $198.8 million, or $1.84 a share, a year earlier. Excluding certain items, per share earnings stood at 76 cents. Revenue increased 18 percent to $485.4 million. Analysts were expecting VeriFone Systems Inc (NYSE:PAY) to earn 76 cents per share on revenue of $496.7 million. Gross margin for the period widened to 41.1 percent from 30.7 percent. For the current quarter, VeriFone Systems Inc (NYSE:PAY) expects adjusted earnings of 70 cents per share to 73 cents per share on revenue between $490 million to $500 million, lower than Street forecasts. VeriFone Systems Inc (NYSE:PAY) shares declined in pre-market trading
United Technologies Corporation (NYSE:UTX)
United Technologies Corporation (NYSE:UTX) forecast lower than expected profit and sales next year, amid the challenging economic environment and declining U.S. defense spending. The company said earnings per share will climb as much as 16 percent to between $5.85 and $6.15, falling short of the $6.13 average of analysts’ estimates. United Technologies Corporation (NYSE:UTX) expects 2013 revenue to increase 12 percent to between $64 billion and $65 billion. Analysts had projected $66.2 billion. CEO Louis Chenevert credited the company’s $18.4 billion acquisition of Goodrich Corporation (NYSE:GR) for driving revenue growth. The company also announced plans to buy back about $1 billion of its shares. United Technologies Corporation (NYSE:UTX) tightened its 2012 profit outlook to $5.32 per share on revenue of $58 billion, matching Wall Street expectations. Shares of United Technologies Corporation (NYSE:UTX) were inactive in pre-market trading.
PPG Industries, Inc. (NYSE:PPG)
Specialty chemical company PPG Industries, Inc. (NYSE:PPG) has agreed to buy the North American decorative paint business of Akzo Nobel N.V. (AMS:AKZA) for $1.1 billion. The deal is expected to close during the second quarter of next year. The North American decorative paints arm, which makes the Glidden brand, had sales of $1.5 billion in 2011, according to a joint statement from the companies. Pittsburgh-based PPG Industries, Inc. (NYSE:PPG) said the acquisition would expand its store network to around 1,000 outlets and help the company benefit from a recovery in the U.S. construction markets. PPG Industries, Inc. (NYSE:PPG) also announced plans to carry out a share buyback of up to $750 million next year. PPG Industries, Inc. (NYSE:PPG) shares were inactive in early morning trade.
Schlumberger Limited. (NYSE:SLB)
Oilfield-services provider Schlumberger Limited. (NYSE:SLB) said fourth-quarter earnings would be hurt by weaker-than-expected drilling activity in North America and continued contractual delays in Europe and Africa. Schlumberger Limited. (NYSE:SLB) now expects to take a five-cent to seven-cent hit to per-share earnings in the fourth quarter. Analysts were expecting per-share earnings of $1.13. Schlumberger Limited. (NYSE:SLB) said international drilling activity has begun to slow down due to an uncertain global economic environment. Shares of Schlumberger Limited. (NYSE:SLB) were down 3.5 percent before the opening bell.
AVG Technologies NV (NYSE:AVG)
AVG Technologies NV (NYSE:AVG) has signed a new search and distribution agreement with Yahoo! Inc. (NASDAQ:YHOO). Amsterdam-based AVG Technologies NV (NYSE:AVG), which makes antivirus and security software and has about 143 million active users, said the deal will increase search-provider choices for its customers. The company is likely to provide more details at a conference call on Thursday at 5 P.M. ET. AVG Technologies NV (NYSE:AVG) gained in early trade.
Centene Corp (NYSE:CNC)
Health insurer Centene Corp (NYSE:CNC) slashed its view for the current year citing higher medical costs related to more intensive flu season in its largest markets and higher-than-expected health care use in Texas. Centene Corp (NYSE:CNC) has been facing trouble in its Kentucky and Texas Medicaid contracts for some time now. In October it said it planned to exit the Kentucky contract next summer. Centene Corp (NYSE:CNC) now expects earnings per share in the range of 10 cents to 20 cents, sharply lower from its prior view of 56 cents to 66 cents for 2012. For 2013, the company expects earnings to range between $2.60 and $2.90 per share, on premium and service revenue of $9.7 billion to $10.0 billion. Centene Corp (NYSE:CNC) shares were down 5 percent in pre-market trade.
Quiksilver, Inc. (NYSE:ZQK)
Surf wear retailer Quiksilver, Inc. (NYSE:ZQK) said fiscal fourth-quarter earnings slumped 94 percent, hurt by weaker margins and lower European sales. Excluding items, earnings for the quarter increased to 7 cents a share from 5 cents a share in the year-ago period, but fell short of the average analysts’ estimate of 10 cents a share. Revenue edged 2.5 percent higher to $559 million, also trailing estimates of $563.9 million. Among regions, Quiksilver, Inc. (NYSE:ZQK) said sales in the Americas increased 12 percent, while Europe was down 9 percent. Gross margin for the quarter narrowed to 46 percent from 52 percent a year-ago due to a rise in input costs. Shares of Quiksilver, Inc. (NYSE:ZQK) tanked 15 percent in early morning trade.
Amgen, Inc. (NASDAQ:AMGN)
Amgen, Inc. (NASDAQ:AMGN) the world’s largest biopharmaceutical company boosted its quarterly dividend by 31 percent and said it will buy back an additional $2 billion in shares. Amgen, Inc. (NASDAQ:AMGN) will pay shareholders 47 cents a share, up from the current pay-out of 36 cents a share. The 11-cent increase will cost Amgen, Inc. (NASDAQ:AMGN) an additional $84.4 million. The latest buyback authorization is on top of the $500 million remaining from its current $10 billion program. Separately, Amgen, Inc. (NASDAQ:AMGN) named former Mattel, Inc. (NASDAQ:MAT) CEO, Robert Eckert, to its Board of Directors. Shares of Amgen, Inc. (NASDAQ:AMGN) were up 0.5 percent in pre-market.
Economic Calendar for Friday, December 14, 2012:
08:30 A.M. ET: Consumer Price Index (MoM) (November)
08:30 A.M. ET: Consumer Price Index (YoY) (November)
08:30 A.M. ET: Consumer Price Index Ex Food & Energy (MoM) (November)
08:30 A.M. ET: Consumer Price Index Ex Food & Energy (YoY) (November)
08:58 A.M. ET: Markit Manufacturing PMI (December)
09:15 A.M. ET: Industrial Production (MoM) (November)
09:15 A.M. ET: Capacity Utilization (November)
